Nokia Christmas sales likely to exceed 100 million handsets
Motorola difficulties erode market confidence in Nokia
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Nokia will publish its fourth quarter and annual results for 2006 on Thursday, January 25th, at its premises in Espoo, where a summary of the results with a commentary on the company's progress to date will be presented.
While it is clear that Nokia sold a huge number of handsets at the end of last year, probably in excess of 100 million units, analysts have differing opinions as to the prices and profit margins of the mobile devices that were sold.
All other major mobile manufacturers have already published their figures for last year, giving some possible signals about Nokia's progress.
While Sony Ericsson posted a record profit for 2006, Samsung also sold an all-time high number of mobile phones in the fourth quarter, owing to strong sales of its popular Ultra Edition cellphones.
It can be assumed that Nokia's profitability has not suffered so much as might have been anticipated after American mobile phone giant Motorola issued a profit warning at the beginning of January, causing Nokia shares to fall on the Helsinki Exchanges.
While competing with its rival Motorola, Nokia has apparently reduced the prices of its low-end phones in India and other developing markets. In addition to Motorola, also Samsung has reported that they have been suffering from tough competition.
The sales of Nokia's most expensive handsets, the so-called N-series multimedia devices, are likely to have been as good as the sales of Sony Ericsson's similar handsets. While entering into price competition with its medium-price 3G mobile devices, Nokia has apparently recorded good profit margins for the upscale models.
Whilst most believe that Nokia's market share has continued to grow from the 35 to 36 per cent recorded in July through October, the analysts have different opinions about the company's price development. During the same July-October period in 2006, the average price for a Nokia handset sold fell from EUR 102 to EUR 93. If this has stabilised since then and Nokia has been able to hold up its margins, then the company will present impressive earnings figures on Thursday. If the price erosion has continued, it may be a different story.
However, at least First Call Corporation, who base their views on the earnings projections made by those analysts at the brokerage firms who cover Nokia Corporation, has suggested net operating profit of EUR 1.5 billion for the last quarter of 2006.
Helsingin Sanomat
